Musings on the Minimum Wage

My first job was as a cashier at Wal-Mart. I was 16 and I worked primarily on the weekends. During the summers I went full-time. When I started there, a lot of the people I worked with were like me – students earning a little money for a car or just spending. A lot of the non-managers were moms, looking to make some extra money for their families now that their kids were in school full-time. Minimum wage was $5.25 an hour, but I made a cool $5.40. For me, that was good money. I did a pretty simple job and had money to blow when I wanted to go out with my friends.

Things have changed since then, quite a bit. The auto industry hadn’t fallen completely apart in 1997. Jobs weren’t being outsourced to other countries as soon as we had a need for them. Wal~Mart was still advertising how it was proud to carry products with the stamp “Made in America.” We in the United States had not yet figured out how much cheaper (though less safe) it was to have children in China make our toys.

It’s 2014. The federal minimum wage is $7.25 an hour. To put it in a more useful perspective, people working full-time at minimum wage in 1997 made $840 per month, before taxes. Now, it’s $1,160 per month, an increase of $320. That seems like a decent raise. Until you factor in how much more expensive everything else has gotten.

In 1997, gas was somewhere around $1.50 per gallon. If you figure that the average person uses a 13-gallon tank once per week (and that’s on the low end), that’s $78 per month. You could find a place to live for around $600/month. A pound of ground beef was about $2. You could see a movie for $5. Even then, on minimum wage, you’re scraping by.

Today gas is somewhere around $4/gallon. For the same fill-up schedule as in 1997, you’re paying over $200 per month for gas. Rent is $800 per month. Internet, something that didn’t really exist in 1997 for a lot of people, is at least $25 per month. Cell phones. something else most of us didn’t have in 1997 (unless you were a drug dealer), have replaced land lines, and are typically $40 per month before taxes, and that’s for the cheaper prepaid plan.

That “extra” $320 per month disappears faster than it gets made.

So, yes, I think they need to take a look at raising the minimum wage. However…

Raising the minimum wage isn’t going to fix the problems we have. There’s a limit to how much it can be raised before we start to see a trend toward the negative. I enjoy going to McDonald’s, Burger King, Chick-Fil-A, and pretty much everywhere else except Taco Bell. Am I willing to pay a little more for my value meal if it means someone is going to keep their lights on? Absolutely.

But there will come a point when I think to myself, “Holy shit! Those chicken nuggets better give me a massage before I eat them for that price.” When that happens, I’ll go out to eat less and less. And so will you. When we go out to eat less, restaurants close or reduce the number of employees. Then we’re back at square one.

We need more jobs. Good jobs. The ones that disappeared overseas, we need them back. People rail against Wal-Mart because they’re huge, closely held by a small number of family members, and when something goes wrong, it’s incredibly public and awful. But let’s remember, Target, Walgreens, Macy’s, and Hot Topic aren’t non-profits either. These people are in business to make money. That means that they cut hours so they don’t have to cover anyone’s insurance. They outsource jobs and buy goods made elsewhere because it’s cheaper. It freaks me out that the frozen chicken nuggets I love so much are probably coming from China. Seriously? We can’t make those bad boys in the US?

What we fail to realize is that we, the consumer, are the problem. It’s a simple situation of economics – if demand rises, so does supply. We demand these things, so they provide them. It’s as simple as that. It’s hard to not buy products from China since it seems like everything is made there. But, if we made a conscious effort to buy less made overseas, we might make a difference.

If we bought secondhand instead of buying everything new, we might make a difference.

If we actually paid attention to elections and voted for candidates who were going to do something to help us, instead of helping big business, we might make a difference.

If we started pushing for our representatives to enact legislation that closed tax loopholes for businesses who export jobs overseas, we might make a difference.

If we told our representatives that we want to reward businesses who keep the jobs in the United States, we might make a difference.

If we started thinking about how much we consume and whether we actually needed all of it, we might make a difference.

If we spent money on those facing difficult times, instead of ourselves (do you actually need that $5 cup of coffee every day?), we might make a difference.

So I ask you this, how are YOU going to make a difference today? Tell me more ways that I can make a difference today.